President Dr Mohamed Muizzu has ratified the National Debt Act
The National Debt Act introduces several key reforms aimed at bolstering the country’s debt management capabilities.
Presidency mv
The Maldives has long relied on tourism as the cornerstone of its economy. However, like many small island nations, it faces significant financial challenges, including a growing national debt exacerbated by the COVID-19 pandemic among other struggles that the country has faced since then. With this, managing this debt sustainability has become a pressing issue as the country grapples with balancing economic growth and fiscal responsibility.
In a significant step toward addressing these challenges, President Dr Mohamed Muizzu ratified the National Debt Act on 4th December 2024 - showcasing a comprehensive framework designed to streamline the state’s approach to borrowing while ensuring transparency and accountability. The Act, passed by Parliament on November 27, lays the foundation for more responsible fiscal management, with a focus on minimizing debt servicing costs and safeguarding the economic well-being of future generations.
The National Debt Act introduces several key reforms aimed at bolstering the country’s debt management capabilities. A cornerstone of the legislation is the establishment of a dedicated Debt Management Department within the Ministry of Finance. This new entity will replace the current department, ensuring a more focused and efficient approach to managing the nation’s debt obligations.
The Act also outlines clear strategies for achieving mid-term debt management objectives, emphasising responsible borrowing practices that limit the long-term impact on the Maldives’ fiscal systems. It also specifies the financial instruments available for securing financing and mandates transparency mechanisms to foster accountability in debt management practices.
With the bill now published in the Government Gazette, it is set to take effect in six months. The legislation marks a decisive move towards a sustainable financial future, reflecting the Government’s commitment to protecting the nation’s economic resilience while securing the well-being of future generations.
